On May 25, the executive committee of the Michigan Economic
Development Corp. publicly cried
foul over "unwarranted criticism" of the agency and warned that
"political in-fighting" could hurt the state's business investment
climate. But the criticism
of the state's chief "jobs" department is not only warranted, it's
overdue.

The letter specifically references the MEDC's Michigan Economic
Growth Authority tax credit program as evidence of effectiveness,
claiming the program is "enabling us to compete successfully against
other states and countries. ..." The officials cite no supporting
evidence. The claim, however, is at odds with the four scholarly
analyses of MEGA that have been produced since its inception - two by
the Mackinac Center, one by the Anderson Economic Group and one by the
Upjohn Institute.

A 2005 study by the Mackinac Center showed that MEGA had no impact on
per-capita personal income or job creation. We did find that for every
$123,000 in tax credits offered, one construction job was created, but
100 percent of those jobs disappeared within two years.

Last year, we used a different modeling technique to isolate MEGA's
effects from the larger economy and found that for every $1 million in
tax credits earned in a county there was an associated loss of
95 manufacturing jobs.

The Anderson Economic Group study, published in March and funded by
the Michigan Education Association, found that MEGA and two similar
state programs cost the state 25,000 jobs and $85 million in tax revenue
annually.

The Upjohn study, published in April, was by far the most favorable
study done. Even so, the authors' claim that MEGA has created 18,000
jobs since 1996 totals just 1,600 a year on average. If this is the
MEDC's idea of success, we would hate to see their definition of
failure.

In March, the MEDC offered a refundable tax credit deal to a
convicted felon out on parole. While the state would not allow embezzler
Richard A. Short to possess a credit card, the MEDC placed him on stage
with Gov. Jennifer Granholm to celebrate his $9.1 million subsidy deal.

In April, the state Auditor General chastised the job agency for
handing out MEGA tax credits to companies that had not earned them.
During later testimony before a House committee, MEDC CEO Greg Main
acknowledged that for its first 10 years, the MEDC did not audit the
businesses that were collecting tax credits.

To date and to our knowledge, MEDC officials have not refuted a
single fact in these critiques. Since its creation, the MEDC has spent
hundreds of millions of dollars in appropriations and tax expenditures
while Michigan has lost 708,500 jobs and led the nation in unemployment.
Yet they have the temerity to describe public discussion of these
failings as "unwarranted."

The MEDC is a highly secretive organization that in recent years has
become even less transparent. The Mackinac Center has documented many of
its efforts to delay, deflect and obfuscate. Why hide? Because the MEDC
is creating more job announcements than real jobs.